Description

SEBI extends deadlines for stock brokers to submit net worth certificates required for offering margin trading facility to clients.

Summary

SEBI has relaxed the timeline for stock brokers to submit net worth certificates required for offering margin trading facility to their clients. The new deadlines are harmonized with financial result declaration timelines under SEBI LODR Regulations 2015.

Key Points

  • Stock brokers must submit half-yearly net worth certificates as on March 31 and September 30 each year
  • New deadlines: within 60 days from March 31 half-year end and within 45 days from September 30 half-year end
  • Previously required submission by April 30 and October 31 respectively
  • Changes align with financial result declaration timelines under Regulation 33 of SEBI LODR 2015
  • Decision made to promote ease of doing business based on market participant representations

Regulatory Changes

  • Para 4.5.3 of Chapter 1 of Master Circular for Stock Exchanges and Clearing Corporations (SECC) dated December 30, 2024 modified
  • New submission deadlines: May 31 (for March 31 certificates) and November 15 (for September 30 certificates)
  • Timeline harmonization with existing financial reporting requirements

Compliance Requirements

  • Stock brokers offering margin trading facility must submit auditor-certified net worth certificates half-yearly
  • Certificates must confirm net worth as on March 31 and September 30
  • Stock exchanges must make necessary amendments to bye-laws, rules and regulations
  • Stock exchanges to notify members and publish on websites

Important Dates

  • Effective Date: Immediately
  • New Deadlines:
    • May 31 for certificates as on March 31
    • November 15 for certificates as on September 30
  • Reference Period: Half-yearly as on March 31 and September 30

Impact Assessment

This regulatory relief provides stock brokers additional time to comply with net worth certification requirements for margin trading operations. The extended deadlines reduce compliance burden while maintaining investor protection standards. Impact is positive for broker operations with improved business ease without compromising regulatory oversight.

Impact Justification

Regulatory relief for stock brokers affecting margin trading operations with extended compliance deadlines